Common Health Insurance Terms You Should Know

Do you know how to make a smart decision regarding health insurance that will benefit you and your family? What are health insurance terms?

These are premiums, claims, deductibles, sum insured, and co-payments. Knowing the health insurance policy terms gives you peace of mind. You will feel less overwhelmed when your confusion clears, and you understand the crucial role health insurance plays.

Health insurance is a policy that covers your medical expenses from illnesses, accidents, or injuries. So, learn why health insurance terms are important to understand health insurance policy terms and how they benefit you.

What are the Common Health Insurance Terms You Must Know?

1. Premium

Premium is the amount you legally agree to pay your insurance company for coverage. These health insurance terminologies can change depending on the age of the insured person, pre-existing health conditions, coverage amount, lifestyle habits, health insurance add-ons, and occupation. 

For example, a young insured person will have to pay a lower premium compared to a senior citizen with pre-existing health conditions.

2. Sum Insured

Sum insured is the maximum amount of coverage you can claim for any medical emergency that arises. Choose an adequate sum insured so you can avoid out-of-pocket expenses during a claim.

3. Deductibles

A deductible is the amount you choose to pay out of pocket before your insurance coverage kicks in.  Higher deductibles result in lower premiums, but you will have to pay more initial medical expenses during an emergency claim. 

For example, if your hospital bill is ₹50,000 and your policy deductible is ₹20,000, you have to pay ₹20,000 first. After that, your insurer will pay the remaining ₹30,000.

4. Co-payments

Copayment is a cost-sharing method where you bear a fixed percentage of the total hospital or medical expenses. At the same time, your insurer will cover the remaining amount.

Suppose your policy has a 10% copayment and your hospital bill is ₹80,000. In this case, you have to pay ₹8,000, and your insurer will pay the remaining ₹72,000.

5. Network Hospitals

Network hospitals are hospitals registered with health insurance providers. In a network hospital, you can receive cashless treatment after admission, so there is no need to arrange upfront payments.

Also Read: Angioplasty Coverage in Health Insurance: What You Need to Know

6. Pre-existing Conditions

These mediclaim terms explained are health issues that policyholders had before purchasing the health insurance plan. Understanding this health insurance policy term prevents unexpected claim rejections. It also helps insurers assess risk and apply the appropriate waiting period for health coverage.

Pre-existing conditions include thyroid disorders, hypertension, diabetes, asthma, kidney problems, etc.

7. Waiting Period

The waiting period is the time you must wait before claiming health insurance benefits. Every health insurance plan has common waiting periods, including 7 days or 30 days for general claims, and 1 to 3 years for pre-existing conditions.

8. Grace Period

It is a time frame allotted to policyholders for paying health insurance premiums and avoiding policy cancellation.  If you miss the payment deadline, the grace period gives you a week or a few days to complete the payment. 

But failing to pay within the grace period can result in suspension of coverage benefits or policy lapse.

9. Add-ons or Riders

These mediclaim terms explained are additional benefits that you can purchase to enhance your basic coverage.  You can choose optional coverage boosters depending on your medical requirements. 

Bajaj General Insurance offers health insurance plans where you can add critical illness cover, wellness benefits, room rent waiver, or consumables cover as riders with individual or family floater plans. 

10. No Claim Bonus

No Claim Bonus is a reward given for making no claims in a policy year. For example, if you made zero claims in the previous policy year. During renewal, you may receive an increased sum insured or a discount on your insurance premium.

With Bajaj General Insurance, you can get a 10% to 50% discount on premium as a No Claim Bonus for up to 5 consecutive claim-free years.

Also Read: Corporate Health Insurance Plans: Features, Types & Benefits

11. Day Care Treatment

Day care treatment refers to any medical treatment under your policy that does not require a 24-hour hospital stay. The patient is generally discharged on the same day.  Chemotherapy, dialysis, and cataract surgery are considered day care treatments.

12. Exclusions

In health insurance, the term "exclusions" refers to treatments, illnesses, or procedures your health insurance plan does not cover.  For example, cosmetic surgery and any health risks arising due to substance abuse or self-harm are exclusions from a standard health insurance plan.

Why is It Important to Know Common Health Insurance Terminologies?

Understanding common health insurance terms is crucial because it helps you know exactly what you want in your policy coverage and what expenses you will pay.

1. Understanding deductibles and sum insured helps you compare policies and select the right coverage for your medical needs.

2. After knowing the waiting period, you will know how long you must wait before raising a claim for pre-existing diseases.

3. Understanding the cashless claim process and waiting periods helps policyholders get admitted and receive treatment at network hospitals without arranging immediate finances.

4. Knowing sublimits and exclusions helps you prevent out-of-pocket expenses and claim rejections.

Also Read: Top Things to Consider When Buying Health Insurance Policy in India

Final Words

Nowadays, health insurance is crucial and essential for everyone. Understand the terms and conditions completely to protect yourself and your loved ones from hefty hospital bills. Learning health insurance terms such as waiting periods, sum insured, exclusions, copayments, and pre-existing conditions helps you choose the right plan and make better decisions before investing.

If you want to understand your plan’s terminology, Bajaj General Insurance offers flexible sum insured, comprehensive coverage, convenient claim support, and easy online purchase.

FAQs

What do health insurance terms and conditions imply?

Health insurance terms and conditions define the legal agreement between the insurer and the policyholder. They outline the specific conditions under which the insurance company is obligated to pay for healthcare expenses. These terms include inclusions, exclusions, waiting periods, policy renewal requirements, coverage limitations, and the claim procedure. You must understand all of these to ensure the plan meets your needs.

What is the meaning of "alternative treatment" mentioned in my health insurance plan?

Alternative treatment under your health insurance plan covers various treatment options for injuries, ailments, or pre-existing health conditions of the insured person. In India, alternative treatments include coverage for Ayurveda, Yoga, Unani, Siddha, Naturopathy, and Homoeopathy.

What is the difference between sum assured and sum insured?

They sound similar, but "sum insured" is a common term in health insurance. It is the maximum amount your insurance company will pay during the policy period. However, "sum assured" is a popular term in life insurance.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.